According to 2005 U.S. census estimates, approximately 14% of the U.S. population, more than 40 million people, are between the ages of 10 and 19. Recent surveys suggest that of these, less than 15% have access to their parents' credit or debit cards. At the same time, approximately $4 trillion is spent by U.S. consumers shopping. Of this amount, some research suggests that more than 50% is paid for using either credit cards or debit cards. Adding stored value cards purchases would add considerably to the total volume of transactions made by credit, debit or stored value cards (hereafter referred to “Electronic Payment Media”). A majority of purchases are made using Electronic Payment Media. At the same time, the majority of college students, teenagers and pre-teens do not have access to such cards. And so, there has been an ongoing intensifying debate amongst parents whether or not kids should be given access to Electronic Payment Media. There are good reasons for this. Are kids emotionally ready for access to Electronic Payment Media? Are they responsible enough to handle the financial implications that can dramatically impact their parents who are usually financially responsible for their purchases? And how do parents control their purchases? Regardless of debit, credit or stored value, once in the hands of kids, kids can usually make purchases without parent approval subject only to the credit or balance limitations associated with their Electronic Payment Media. Additionally, there are issues of lost cards, credit exposure, identity theft and the other financial risks that make providing access to such payment solutions for kids a difficult decision. It might also be noted many spouses and domestic partners do have access to Electronic Payment Media but lack the financial responsibility to control their spending against such Electronic Payment Media.
There is through embodiments described herein, a method and system empowering children, and other financially irresponsible individuals with an ability to shop on their own and eliminate the need for cash using Electronic Payment Media and real-time electronic communications, such as email and text messaging. A method and system are described to convey real-time control to parents and guardians in advance of intended purchases by those under their guardianship. By way of embodiments, a method and system is described to provide for the approval and/or disapproval of aforementioned intended purchases. Such methods and systems described have heretofore not been available.
Embodiments are described herein for online e-commerce websites and the use of conditional purchases using electronic payment media. The use of cell phones, smart phones, personal digital assistants, and other handheld electronic devices (collectively “Wireless Devices”), the concurrent deployment of high speed wireless networks that connects such wireless devices, and the growing emergence of mobile commerce applications, can provide an end-to-end system that would allow minors, dependents and other people who do not otherwise possess Electronic Payment Media (hereafter referred to as “Minor Dependent” or “Minor Dependents” as the case may be) to make Conditional Purchases in or near traditional brick and mortar environments using their Wireless Devices that is subject to final approval and real-time control of their parents or guardian. An example of the workflow for creating a minor dependent sub-account is shown in FIG. 16. Furthermore, a purchase process for a minor dependent purchase using a sub-account is shown in FIG. 17. A method and system are provided for the use of traditional credit cards or debit cards so that Minor Dependents can be issued ‘conditional purchase’ cards associated with their parent's credit or debit cards such that they too can make purchases online or in traditional store environments subject to real time, near real time or time delayed control of their parents. Because the vast majority of retail sales occur in stores and not online (according to U.S. government estimates, more than 95% of 2004 retail sales occurred in stores as opposed to online or through catalogues), the potential market size is significant.
Thus, it is desirable to provide a conditional purchase system and method and it is to this end that the present invention is directed.